In a shocking turn of events, Bill Ackman resigned from J. C. Penney Company Inc.’s (JCP - Free Report) board effective Aug 12, 2013. This comes few days after Ackman’s much criticized public outcry against the board and it’s functioning. Shares of J. C. Penney rose during the premarket trading.
Ronald W. Tysoe, former Vice Chairman of Federated Department Stores Inc., now Macy’s Inc. (M - Free Report) , has taken over the position. The company stated that it will also be naming another director shortly.
Last week, Ackman in a letter to the company’s board, which he also made public, accused the board of a slow approach to finding the new CEO. Concurrently, Ackman demanded the ouster of the interim CEO Mike Ullman and Chairman Tom Engibous.
Alongside, he urged the board to find a suitable CEO within 30 to 45 days. He further criticized Ullman for taking several decisions without consulting the entire board. Responding to Ackman’s public outburst, the company’s Chairman, Thomas Engibous, said that the board is “extremely disappointed” with Ackman’s sudden move and termed his actions as “disruptive and counterproductive”.
Engibous has strengthened his support for Ullman, stating that the latter is working in the best interests of the company and taking the necessary actions to bring J. C. Penney back on the growth trajectory.
Year-to-date, shares of J. C. Penney have nosedived approximately 36%, reflecting sinking revenues and bigger losses. The company’s restructuring initiatives have been crumbling as it is exhibiting no signs of improvement. Alongside, the company is constantly lagging its peers, Macy's, Target Corporation (TGT - Free Report) and Kohl’s Corporation (KSS - Free Report) .
Currently, J. C. Penney carries a Zacks Rank #3 (Hold).